Sunday, February 26, 2012

Tax Freedom Days in Recent History

Source: The Tax Foundation
Tax Freedom Day is the day in the year when the GDP produced thus far is equal to the total federal, state and local tax bill for that year. When the governments are spending less than their tax revenue, the debt incurred will have to be paid in future taxes. The graph above shows both the Tax Freedom Days as usually calculated and with the current value of future taxes to pay off the deficit in the lighter colored line.

Only in the Clinton administration in the last 40 years was the regular day later than the adjusted day. That is, only briefly in the Clinton administration were tax revenues adequate to fund government expenses.

The huge problem caused by the Great Recession started in 2007 and the stimulus packages created to restart the economy are clearly visible. Our children will be paying a long time for the failure of regulation that led to the crash, bailout, and recession and its resultant stimulus.

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